E-wallets drive surge in deposit accounts, but over 51M Filipinos still unbanked – BSP

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Metro Manila (CNN Philippines, July 16) – An additional five million Filipinos opened deposit accounts in 2017 to 2019 but majority of adults remain unbanked, a new central bank survey showed.

The Bangko Sentral ng Pilipinas' 2019 Financial Inclusion Survey showed an increase in the number of Filipinos with a formal account for financial transactions, which rose to 28.6 percent from 22.6 percent in 2017. This means 20.9 million adults have direct access the financial system, but a bigger 51.2 million people remain unbanked.

There was a "significant improvement" in the number of account owners compared to the progress two years prior, with the BSP pointing out the biggest spike in terms of e-money accounts to record an eight percent increase from a 1.3 percent climb previously. Growth in bank account openings stood little changed at 12.2 percent, while there was a slowdown in sign-ups under non-stock savings and loan associations.

By income group, those in the poorest cluster reported the biggest jump at 27 percent. Users based in North and Central Luzon also saw the largest increase at 26 percent. The BSP pointed out that there are more account holders in rural areas with a 30 percent penetration rate versus 27 percent in urban locations, attributed to the strong presence of microfinance providers.

There are also more women than men account owners in the country, the report added.

More than a third of users use the accounts to save money as well as to receive salaries and benefits, according to the survey.

Those who remain unbanked said they don't have enough money to open an account, while a fourth who think they don't need to join formal financial channels. The BSP said this showed that at least 60 percent of Filipinos are still unaware that lenders now offer basic deposit accounts, where one can sign up with a deposit of ₱100 or even lower.

The report added that depositors still transact mainly through automated teller machines and over the counter, with a small share tapping online channels.

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The survey was done between February and March, right before most of the country went under lockdown due to COVID-19. The BSP said the huge spike in online account openings and e-payments during the period of enhanced community quarantine are not yet included in the figures.

The central bank earlier reported a surge in digital transactions owing to strict stay-at-home rules through the InstaPay, PESONet, and eGovPay channels.

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The BSP has waived interbank fund transfer fees until end-2020 to boost online transactions, but said the decision to keep them free for a longer period will depend on a financial firm's business model. Banks who want to be more competitive would typically remove these charges to rake in more clients, BSP Governor Benjamin Diokno said.